restrictive Covenant HELP!

KrissyBrad

Does everything on sellers TR1 have to be transferred to buyers TR1? if not then this:

'The Transferee confirms that the property is the Transferees only or principle residence and whilst he is the registered proprietor he will continue to use the property as his only or principal home'

this clause is not in the original conveyance and only in the sellers who purchased under Right to Buy.
surely this could be left out by my solicitor as it is only relevant to the previous buyer who purchased with a discount from the housing association?

KrissyBrad

I feel a little more positive than I was a few days ago, that maybe ...

The Transferee confirms that the property is the Transferees only or principle residence and whilst he is the registered proprietor he will continue to use the property as his only or principal home'

this in sellers TR1 does not apply to me and does not need including in my TR1 by my solicitor?

G_M

An earlier TR1 has no meaning so far as you are concerned.

What matters is

* the TR1 used (by you/your solicitor) to register the property in your name. If THAT includes covenants, then yes, those covenants will naturally be registered and will bind you

* the Title document held by the Land Registry. Any covenants registered there against the property, will bind any owner of the property (unless removed).

* any earlier Conveyances or Transfres relating to the property. Where these exist, they may bind any owner in the same way as covenants in the Land Registry Title. Howver in most cases nowadays, if they exist, there will be a reference to the within the Land registry Title.

What does the LR Title document show?

KrissyBrad

Thank you again for guidance, I have looked at the land registry document and there is no mention of the clause:

'The Transferee confirms that the property is the Transferees only or principle residence and whilst he is the registered proprietor he will continue to use the property as his only or principal home'

it states there are restrictive covenants regarding the sellers (named) and also:
A charge having the priority specified in section 156 of
the Housing Act 1985 to secure the liability under the covenant to
repay discount contained in the Transfer dated....
Hopefully I wil be able to complete in next day or two as the information points to it being irrelevant to my purchase

Land_Registry

KrissyBrad - let us know what the outcome is.

No point ringing us as it's legal advice you need here and we can't give you that. We can only provide the registered details you already have.

The only thing I would add is that whilst the discount charge and maybe some conditions applied to first buyer from HA the covenants will often carry on. Part of the arrangements can involve a buyer agreeing to 'observe and perform..........' existing covenants and indeminifyibg the seller against any breach.

And as far as enforcement is concerned that may not always happen for a variety of reasons such as unaware, no appetite, lack of understanding etc etc but that is not always the key point - that's whether the risk of breaching it is worth it. Hence legal advice is essential

KrissyBrad

well everyone, after much toing and froing to South Staffs Housing Association, & solicitors (almost 3 weeks) the HA have deemed that they will not remove the covenant on the deeds and it stands.

section 12 stated 'The transferees (SELLER) and successors in title (BUYER;ME)'

covenant : 'The Transferee confirms that the property is the Transferees only or principle residence and whilst he is the registered proprietor he will continue to use the property as his only or principal home'

I have this morning had to inform the seller that I have to pull out of the sale... we are both very upset. Especially since it was not noticed by solicitor until AFTER I signed the paperwork.
I am now looking for another property:(

just to note: That local houses that previously belonged to the local Council DO NOT HAVE THIS COVENANT and therefore anyone who bought from council CAN LET OUT THAT PROPERTY..... It was only when the housing Association took over the properties from the council several years ago that THEY started to put that covenant on their deeds when sold under Right - to - Buy.

Petite_Anglaise

Hi OP

Sorry to hear that you've had to pull out, but it seems that you probably wouldn't have got the BTL mortgage, if there is strictly no letting out of the property.

We have been searching for a home for many months now (in London), have to say that I've only noticed 1 property that stated on Rightmove that it was not allowed to be let out by the owner.

It wasn't (obvious) ex-council property, but I did wonder why those restrictions are put in place. In a way its great because it encourages owner-occupiers to purchase, rather than simply a BTL transaction which I appreciate is your position.

It did make me wonder though, if we had to relocate in a few years time, it would mean there would be no option to let it out if we struggled to sell.

ognum

There are flats near my home that have clauses in the lease that they cannot be bought to let.

Some I am aware of are on a private estate built in the 60s (now Grade 2 listed).

These are always sold for less than other similar properties simply because of this.